Large HNI and institutional money continuing to buy on every dip: N Jayakumar

What could be the impact of this ceasefire, we have not spoken about it, because last week Indian markets did not collapse. We were down, but we were not out. Do you see a meaningful impact because of what is happening on the border front?
N Jayakumar: We should now maybe start terming it cessation of firing rather than a ceasefire because it is important to understand that all the conditions India have put need to get adhered to. Most people did not see an extension of this war and yet whether it is the HNIs or people in general, large investors have been selling, but very interestingly over the last one week, institutional investors have been buying every single day and the markets have not really gone below 24,000.

So, what was 21,900 to 22,300 a few weeks ago, is now close to 23,500, 24,000 and my own assessment is that the structural advantages of India at this point which has been sort of talked at length on multiple channels including yours is here to play out and I would suspect close to about $2 to $3 billion of HNI positions have got squared off and the market is where it is.

So the market is a buy on every dip, especially large HNI money will come in on most dips and institutions continue to buy. Mark Mobius has talked about how he would like to invest in India and he interestingly talked about the pharmaceutical space and a few other spaces which he wants to invest in, so I am sure people are reading the same tweets and same headlines and if people are seeing the problems besetting China was not a credible place to do business in, you cannot trust them fully, the US with its maverick policies, sort of WhatsApp and Twitter based policy announcements is getting less and less credible.

The dollar is clearly showing the way and we need to watch out for two things, the rising yields in the US because they are again moving up close to the 4.9% on the long bond and 4.5% on the 10-year, the refinancing of US debt is going to become more and more of an issue and the dollar index which is around the 100 levels having tested 98 recently continues to march downwards. So, there is going to be a reallocation of at least currencies to whether it is a Swiss Franc or whether it is the euro or otherwise.

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Those are indicating where money is moving and make no mistake, US exceptionalism is a term of the past and is certainly not an event of the present. Money is moving out of the US. Money is not necessarily going to China. Money is coming to the rest of the world. So, even if you were to be a Doubting Thomas and say no India, it cannot come immediately, it is wishful thinking, money is coming to India whether directly or through allocation into emerging markets. People that have been naysayers, people who have been extremely bearish and cautious, and those are exactly the recipe inducing components of a next bull market.